Narrow range since the December ECB
The fundamental push-and-pull of EUR/USD over the past two months has been the gyrations of ECB policy, risk aversion and diminished expectations for Fed hikes.
Those factors have largely fought to a standstill since the ECB cut on Dec 2.
Technically, the result has been a sideways trade in a 3.5 cent range from 1.0708 to 1.1060. Lately, the range has been narrowing into what looks like a wedge.
When it breaks, look for a big and sustained move. The measured target would be 3.5 cents on either side of that range.
For the moment, the swift rejection of the rally to 1.0940 today argues for the downside and a test of the support in the trendline since the start of January.
